While it is still best to have a high credit score, there are some people who get bad credit scores along the way. We know that credit scores usually impacts the loan approval, but here are a few myths that about bad credit score and its relationship with personal loans.
Only high credit score can qualify for a personal loan
Most loan applicants believe that a bad credit score can severely impact their ability to obtain a personal loan. They feel that there is no hope to get fastest loan approval in Philippines from licensed lenders and banks. This is why they end up borrowing from loan sharks with steep interest rates and unfair fees.
The truth is you can still get a personal loan, though with limitations. Not all lenders reject applicants with poor credit scores. There are lenders who still approve loans in such situations. However, the loanable amount will be limited.
Collateral is required if you have bad credit
Secured loans require collateral to have assets against car loan or home loans. This type of loan has a longer process as it requires more paperwork. On the other hand, there are also unsecured personal loans that do not require any collateral.
Unsecured loans require validation of identity and source of income. Aside from this, a loan company in Metro Manila, Philippines also have their discreet evaluation checklist. A person with bad credit score can still get approved for an unsecured loan with a manageable loan amount and flexible repayment term.
Repayment terms are difficult
When applying for a personal loan, pay attention to the repayment terms. It is a common misconception that borrowers have to pay back your loan all at once.
Rather than repaying your loan in a lump sum, after a month, it is best to get a loan from a registered lender who offers flexible installment schemes.
How can you apply for a personal loan with bad credit?
Don’t let bad credit stop you from achieving your financial goals. Shop around for the best personal loan that fits your needs.
However, be careful when choosing a lender. Avoid loan sharks who prey on people with bad credit. Get a personal loan only from a registered lender.
Once you get approved, make sure to follow the agreed repayment terms and pay on your due date. This way you are not only bridging your financial gap, you are also building up your credit score.